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Welcome to theAlways Write Blog.

This blog by author David Derrico covers
e-books, writing, publishing, & the future of the written word.
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Featured Posts

As 2010 comes to a close, it’s a good time to take a moment to reflect on everything that’s happened this year with e-books, e-readers, the publishing industry, and writing. I’ve included plenty of links to posts with more detail on individual topics you may be particularly interested in. E-Books In 2010, e-book sales roughly […]

The iPad vs. the Kindle 2 in sunlight While I’ve compared the e-Ink screen of the Kindle and Nook with the LCD screen of the iPad before, I might have glossed over the differences too quickly. Today, I was struck by a conversation with a friend who wasn’t really aware of the differences between the […]

Amazon today announced the new Kindle 3, and it’s quite an improvement. The price for the 3G model remains at $189, and the new Wi-Fi only model is only $139 (narrowly edging out B&N’s new $149 Nook Wi-Fi). They should be available August 27, and both include free 2-day shipping. The $189 3G + Wi-Fi model […]

I am extremely excited to announce that my third novel, The Twiller, is available now from Amazon for just $2.99! Click here: http://www.amazon.com/dp/B003SE7LPW I am hoping for a great launch that shoots it up into Amazon’s Top 100 overall bestseller list for Kindle books. I just hit #400, so I’d be extremely grateful for your […]

You may have noticed me talking a lot about e-books lately. That’s because I’m excited about them, and the opportunities they present for readers and authors alike. E-books have several advantages over paper books: they cost less to produce and distribute, they’re better for the environment, they can be downloaded instantly, thousands can be stored […]

I am very excited to announce that Right Ascension has recently topped the charts as the #1 best-seller in Amazon’s Kindle Store “Technothriller” category. The sequel, Declination, is also selling better and better, so I am gratified to see that people are enjoying my first novel enough to purchase and read the second one. I […]

If you’ve been following e-publishing lately, you may have heard that today, 5 out of the “Big 6” publishers forced Amazon to agree to an “agency model” when selling e-books instead of the previous “retail model.” Under the retail model, publishers set a “list price” for e-books (usually the same $25 or so they set for the hardcover), and retailers like Amazon pay them a fixed percentage of that price, such as 50%. Amazon would then pay the publisher $12.50 for each e-book sale, and price the book however they wanted: $12.51, $19.99, $25, or even $9.99 (as a loss leader).

As of today, 5 large publishers told Amazon they must sell their e-books under the agency model (physical books remain on the retail model). Under the agency model, the publisher sets the final sale price, and Amazon gets a flat 30% cut of each sale. That means Amazon is not allowed to have “sales” on e-books, and that a particular e-book should be the same price everywhere. This shift was caused in large part by the entry of the iPad (which I am still not convinced will be a popular place for people who actually buy and read e-books) and Apple’s embracing of the agency model (just like in their iTunes Store and App Store).

Apparently, the large publishers weren’t happy about Amazon taking a loss and selling NYT bestsellers for $9.99 (even though they sent the publishers $12.50 per sale), because they are concerned Amazon is “devaluing e-books.” If you ask me, the large publishers are terrified of e-books, since they require a massive shift in their business model (involving costly layoffs, restructuring, reduction of rent and other overhead, changing contracts and relationships, etc.). They know that some publishers might adapt well and stay on top … but not all of them will. So they seem intent on stalling e-book adoption as long as possible (as evidenced by them trying to raise prices in the face of clear consumer outcry, attaching invasive DRM to their titles, disabling TTS access, delaying e-book releases, and generally releasing poorly-formatted scans of physical books).

So, today, most large publisher e-books will go up in price from $9.99 to $12.99 or $14.99.

It’s times like this that I’m glad to be an independent author … while the idea of a huge book deal with a traditional publishing house had always been my dream, I’m thinking more and more of the benefits of being nimble in a quickly-changing e-book industry. I wonder if the big publishing houses read forums and blogs and comments like I do; I wonder if they have any idea what their customers are feeling or how they think. Sometimes I wonder if they “get” e-books at all. It sure seems like they see them as a threat to be fought, instead of an amazing opportunity to be embraced. “Let’s delay releases! Jack up prices to double that of paperbacks! Infest books with DRM! Format them like crap!”

One thing I know for sure is that the vast majority of Kindlers are passionate readers (in a world where readers are an endangered species). In other words, the publishers’ very best customers. Or, as I see it, the reason I write.

I hate to say it, but the big publishers jacking up prices can only make the prices charged by most indie authors look that much better in comparison ($0.99 vs. $14.99 — wow). But, if they succeed in killing the fledgling e-book industry before it can really take off, then we all lose.

3 Responses to “E-Books and the Agency Model”

Whatever happened to laws regarding anti-trust/collusion that are supposed to keep monopolistic and abusive cartels like these corrupt publishers at bay? Yet another fine example of how far we’ve fallen in terms of consumer rights in this “free” market. The so-called “competition” with the too-big-to-fail institutions in every profession is an absolute joke. I hope new technology like the E-book will soon free us of this bondage of antiquity and mercilessly dispatch these tyrannical obstructionist dinosaurs of progress.

If the publishers don’t adapt (which will surely be difficult and painful), they will go the way of the buggy whip makers and typewriter manufacturers. It has happened before and it will happen again. But the e-book revolution has come too far, and reached too many people, for them to turn back the hands of time and put the cat back in the bag. I wonder when some of the big publishers will realize that and start embracing e-books as an opportunity instead of fearing them as a challenge to their dominance?